Compare car leasing agreements
How the leasing factor helps to save
Car leasing deals are a dime a dozen. But by no means are all offers worthwhile. With the leasing factor, the offers can be better compared.
Leasing is no longer only attractive to craftsmen. If you do not want to be tied to a particular car for a long time and do not want to take out a large loan, leasing is a good choice. The installments are now also affordable without a trading license. However, the market is confusing, there are many providers and offers with different conditions abound. So how do you proceed?
When the decision about the dream car has been made, the leasing factor helps to evaluate and compare offers and conditions for a leasing offer. In short, it expresses how much car the lessee gets for one euro of the monthly lease rate. The lower the leasing factor, the better the offer. It means:
- Supplier 1 has a leasing car on offer with a leasing factor of 1.0. In this case, the lessee also receives 1 euro of the vehicle’s value for 1 euro of the leasing rate, i.e. list price.
- Provider 2 offers the same model with a leasing factor of 0.5. According to this contract, the lessee will receive 1 : 0.5 = 2 euros of the vehicle’s value for 1 euro of leasing fee. So this offer is better.
Many providers now publish the value for reasons of transparency. The leasing factor is also specified for the deals from ntv Autoleasing.
Calculation of the leasing factor: an example
If the value is missing, interested parties can easily calculate it themselves. The monthly rate and the car’s gross list price are set in relation to this. You don’t need a PhD in mathematics to do the math: the monthly rate is divided by the vehicle’s list price and multiplied by a factor of 100. For example, with a car list price of 30,000 euros and a lease rate of 250 euros per month, the calculation is: 250 : 30,000 x 100 = 0.83.
What to consider when comparing
The leasing rate is only objective if apples are not compared to oranges. The following must be observed:
- The vehicles must be identical or at least the same vehicle class
- Do not compare commercial and private leasing
- The number of kilometers per years and the contract period of the tenders should be identical if possible
- Special benefits such as supplementary insurance or benefits are not taken into account in the calculation
- Any special payments must be taken into account
If a special payment is due, the leasing factor is calculated by dividing the special payment by the lease term. The result is added to the rate divided by the gross list price and the result multiplied by 100.
The gross list price of the desired vehicle is 25,000 euros. The monthly lease rate is 200 euros plus a special payment of 1,000 euros. The contract runs for 24 months. Here is the bill:
1,000 euros (special payment) : 24 months (duration) + 200 euros (lease rate) : 25,000 euros (gross list price) x 100 = 0.96 (lease factor)
Important: Transfer costs, which the dealer normally charges, can also be included in the calculation formula for the leasing factor. But then you talk about the total cost factor, which no longer has to be compared with the leasing factor, since an objective assessment can no longer be guaranteed.
Which leasing factor is good?
The following rough classification helps with the question of how to evaluate the result:
- 0.40 – 0.65: Excellent
- 0.66 – 0.75: Very good
- 0.76 – 0.99: Fixed
- 1.00 – 1.29: Acceptable
- From 1.30: This is better
3 offers where the leasing factor fits
Gross list price: €30,990
Lease price: €159
Duration: 24 months
Leasing factor: 0.59
2. Renault Austral Equilibre
Gross list price: €29,990
Lease rate: €198.98
Duration: 24 months
Leasing factor: 0.66
3. Audi A6 Avant (used car)
Gross list price: €73,500
Leasing rate: €499
Term: 48 months
Leasing factor: 0.68
Leasing factor as a rough classification
The lease factor should never be seen as the ultimate calculation tool, but rather as a rough guide when comparing different deals. Why? Many influences affect the leasing offers, which cannot be calculated precisely. If a deal for an electric car, for example, contains a quota of free electricity for charging, this is not included in the leasing factor. With kilometer leasing, which is now common, you must also be aware of how many kilometers are included in the offer and how high the costs are per additional kilometer driven, because this is also not included in the calculation of the leasing factor. The decision should not depend solely on the leasing factor, but always on the total package.